Football Federation Australia (FFA) have issued a 'show cause' notice to the club in response to the banner, which they described as "offensive to any reasonable member of the public", and the club may face severe penalties from the governing body.
The banner, depicting a blue-faced man said to resemble Sydney FC coach Graham Arnold performing a sex act, was held aloft by Wanderers' fans during their 1-0 A-League victory at Sydney's Olympic Stadium.
Wanderers Chief Executive John Tsatsimas said in a statement on Tuesday the supporters group had shown disdain for the club.
"Following a thorough review of the incident on Saturday including review of CCTV footage at the venue and examination of those involved ... we have acted to remove them from our club," Tsatsimas said.
"This incident involved key leaders of the RBB who have shown no remorse for their actions of bringing our club and the game of football into disrepute and have continued to flaunt their disdain for the club and our diverse and inclusive membership family further on social media.
"As a club we have had enough and have put the entire group on notice."
The 2014 Asian Champions League winners said the bans were imposed by the club and not by the FFA or the venue.
Western Sydney added that if there was any further trouble from the group, either in person or on social media, then the entire section where they watch games -- called the active supporter area -- would be shut down.
Western Sydney have already been given a suspended points deduction until the end of the season after fans lit flares in a previous match.
(Reporting by Greg Stutchbury in Wellington; Editing by Peter Rutherford)
